Tech Mahindra Ltd (TECHM) Quarterly Report Analysis & Insights

Tech Mahindra Ltd

| Consolidated Results for Quarter & Audited Year Ended March 31, 2026

⬤22nd Apr 26

Summary : Tech Mahindra reports strong FY26 performance driven by AI-led transformation, record deal wins, and increased dividends.

Quarterly Report Analysis & Insights

Financial Disclosures

FY26 Consolidated Employee Benefits Expense: INR 304,788 Mn.
FY26 Consolidated Subcontracting Expense: INR 60,997 Mn.
FY26 Consolidated Finance Costs: INR 3,374 Mn.
FY26 Consolidated Depreciation and Amortisation Expense: INR 18,816 Mn.
FY26 Consolidated Other Expenses: INR 112,028 Mn.
FY26 Consolidated Exceptional Item (related to New Labour Codes): INR 2,724 Mn.
FY26 Consolidated Revenue from Operations: INR 568,154 Mn (USD 6,385 Mn), up 1.9% YoY (0.6% in constant currency).
FY26 Standalone Revenue from Operations: INR 489,270 Mn.
Segment-wise (FY26): IT (INR 477,670 Mn), BPS (INR 90,484 Mn).
Geography-wise (FY26 YoY growth): Americas (0.2%), Europe (8.9%), ROW (-1.2%).
Vertical-wise (FY26 YoY growth): Communications (2.6%), Manufacturing (5.9%), BFSI (3.7%), Technology, Media and Entertainment (-2.7%), Retail, Logistics and Transport (7.3%), Healthcare and Lifesciences (-0.6%).
FY26 Consolidated Net cash generated from operating activities: INR 61,720 Mn.
FY26 Consolidated Free Cash Flow: USD 616 Mn.
FY26 Consolidated Cash and Cash Equivalents at year end: INR 50,461 Mn (USD 892 Mn).
Alleged advances of INR 12,304 million related to erstwhile Satyam Computer Services Limited.
Contested Regional Provident Fund Commissioner order for INR 12,874 million.
FY26 Consolidated Total Assets: INR 493,694 Mn (vs INR 444,945 Mn in FY25).
FY26 Consolidated Total Equity: INR 300,770 Mn (vs INR 277,917 Mn in FY25).
FY26 Consolidated Suspense Account (Net): INR 12,304 Mn (unchanged from FY25).
Both Consolidated and Standalone Financial Results are presented and audited.

Corporate Overview

Americas (49.8% of FY26 revenue, 0.2% YoY growth)
Europe (25.8% of FY26 revenue, 8.9% YoY growth)
Rest of World (ROW) (24.4% of FY26 revenue, -1.2% YoY growth)
Challenging macro environment
Technology consulting and digital solutions to global enterprises.
Offers IT services, BPS, engineering services, network services, customer experience, AI & analytics, cloud & infrastructure services.
Accelerating transition to an AI-led organization, embedding AI across services and expanding capabilities for value delivery.
Achieved highest deal wins in recent years, including consecutive quarters exceeding $1 billion.
Focused on scaling with discipline and on track to delivering FY27 commitments.
FY26 marked the end of the Stabilization Phase of transformation journey, with margins expanding for the 10th consecutive quarter despite a challenging macro environment.
Increased dividend by over 13%, taking total dividends declared for the year to ₹51 per share, the highest ever.
Global enterprises across various industries
North American automotive OEM
European retail bank
Fortune 500 energy major
Global public health alliance
Global technology major
European telecommunications operator
Information Technology (IT) Services
Business Process Services (BPS)
Total headcount at 147,623 (down 1,108 YoY)
Serving 1100+ clients globally
LTM IT attrition at 12.1%
80% of global workforce is now AI-enabled
Accelerating transition to an AI-led organization
Embedding AI across services and expanding capabilities for value delivery
On track to delivering FY27 commitments

Risk Factors

Legacy Satyam legal claims.
PF Commissioner order.
Challenging macro environment.
Impairment of investments.

Key Drivers

Highest ever deal wins.
Strong AI-led transformation.
Increased dividend payout.
Expanding margins despite macro challenges.

Auditor’s Report

Unmodified Audit Reports for both Consolidated and Standalone Financial Results.
Attention drawn to Note 3 regarding certain matters related to erstwhile Satyam Computer Services Limited, specifically alleged advances of INR 12,304 million, which management believes are not payable.

Board Commentary

Recommended Final Dividend of Rs. 36/- per equity share (720%) for FY26.
Total dividend for FY26 is Rs. 51/- per equity share (1020%), which is the highest ever.
Legacy issues related to erstwhile Satyam Computer Services Limited, involving alleged advances of INR 12,304 million.
Order from Regional Provident Fund Commissioner for Rs. 12,874 million (PF contributions + interest) for employees deputed to non-SSA countries.
Legacy issues related to erstwhile Satyam Computer Services Limited, involving alleged advances of INR 12,304 million, which management believes are not payable.
Order from Regional Provident Fund Commissioner for Rs. 12,874 million (PF contributions + interest) for employees deputed to non-SSA countries, which the company has contested and expects no material financial impact.

Management Discussion & Analysis

Future Strategy

Accelerating transition to an AI-led organization
Embedding AI across services and expanding capabilities for value delivery
Scaling with discipline and achieving FY27 commitments
Supporting clients move from AI experimentation to execution at scale

Industry Overview

Focus on AI adoption and digital transformation
Accelerating innovation and strengthening digital resilience

Macroeconomic Outlook

Challenging macro environment

Operational Focus Areas

AI as a core growth and execution engine across large enterprise engagements
Shift from pilots to scaled, multi-year programs embedded into client operating models
Workforce upliftment through AI training and enablement

Performance Drivers

Highest ever deal wins of $3,794 Mn in FY26 (up 41.6% YoY)
AI-led transformation initiatives and capabilities
Margin expansion for the 10th consecutive quarter
Increased dividend payout to shareholders